After two years of hold-the-line budgets, Red Deerians can expect to pay 4.61 per cent more in municipal tax increase for 2023 and a projected 4.12 per cent more in 2024.
The budget process wrapped up Monday on Day six of what was supposed to be a three-day process.
Mayor Ken Johnston said all the additional time showed how hard councillors were working — often in a line-by-line way — to try to reduce the tax increase for city residents during a difficult time when inflation is hiking costs by seven per cent or more.
“Council was trying to find every single way to soften the impact on citizens,” said Johnston — while still addressing “challenges.”
These included higher negotiated policing salaries and the need to hire 14 emergency services workers to ease a stressed system over the next two years, while also keeping city user fees at a reasonable level.
The achieved tax increase is actually slightly lower than the guidelines that city council gave administration before the process began — to keep spending in line with a projected tax increase of no more than 4.7 per cent for 2023 and 4.3 per cent for 2024.
The approved tax increases will bring an additional $6,501,749 in municipal tax revenue to the city in 2023, and an extra $6,125,835 in 2024. The city’s total operating budget for next year is about $389 million.
Under the 2023 tax hike, owners of a typical Red Deer home assessed at $345,000, will pay about $114 more in property taxes per year, or $9.57 per month, for services like police, ambulance and fire services, road and parks maintenance, snow clearing and city recreation facilities. (Individual property taxes will vary based on assessed property values).
A new slimmed-down multi-year budget process, which left some councillors with a lot of questions about details that were left out of their budget binder, will be evaluated before next year, said the mayor.
Johnston praised administration for the tough job of cost-cutting “in recognition of our community… We are confident we landed in a place of balance,” between reducing costs and maintaining service delivery that residents expect, he added.
City Manager, Tara Lodewyk said, “This budget invests our resources towards maintaining the infrastructure and the things Red Deerians rely on while recognizing we are all feeling the same impacts of inflation in our homes and businesses.”
As part of the budget process, council accepted a Strategic Plan with a focus on planning for a financially sustainable future.
At the suggestion of Coun. Kraymer Barnstable, council also approved taking a special dividend of $800,000 in each year of 2023-2024 from the Electrical Utility Reserve in order to whittle the budget down to the 4.61 and 4.12 tax increases.
This fund helps pay for the ongoing maintenance of city-owned utility delivery infrastructure. The city’s Chief Financial Officer, Ray MacIntosh, confirmed the $16-million reserve will be sustainable, despite the two transfers to city operating funds.
Some of the highlights of the 2023-2024 budget include the increased funding for Red Deer Emergency Services, funds to start the process of revitalizing Centennial Plaza Park, funding to explore building an Indigenous Cultures Centre, a review of the snow and ice control policy in 2023, and creating a long-range financial plan and services review.
“What residents don’t really see in this budget is a bunch of new and shiny things,” said Johnston.
He noted there are no new amenities planned, no big shifts in services – “it is the basic costs of doing business and delivering services to our community.”
Council did approve changes to Community Grant Funding, adding one-time funding for Central Alberta Crime Prevention and increased one-time funding towards Sport and Recreation objectives
Council also resolved to review the city council’s self-imposed debt limit policy. And city administration was also asked to bring back information about the implications or challenges of adding the construction of an aquatic centre and a new pedestrian bridge between Capstone and Bower Ponds to the 10-year Capital Plan.
Red Deerians will face fee increases next year to recreation, transit and utilities.
The mayor added the budget for 2023 and 2024 is about ensuring city services “are here, safe and available to all our residents, (and that) our city is open for business, and ready for visitors.”
“Council and I are confident that the multi-year budget …allows administration to maintain levels of service to our citizens in the most efficient and effective way possible, while ensuring our infrastructure continues to be maintained.”